OPS rejects SSB tax hike, cites threat to jobs, investments

By Merit Ibe

Nigeria’s organised private sector (OPS) has urged the federal government to adopt a balanced, evidence-based and coordinated approach to excise taxation, warning that plans to increase taxes on sugar-sweetened beverages (SSBs) could threaten jobs, investment and industrial growth.

Speaking on behalf of the non-alcoholic drinks sector, the Manufacturers Association of Nigeria (MAN) expressed concern over the Customs and Excise Tariff (Consolidation) Act Amendment Bill 2025, which proposes replacing the current excise duty of N10 per litre on SSBs with a percentage levy based on retail prices.

MAN said while the sector supports government efforts to boost revenue and improve public health outcomes, fiscal policies must remain predictable, data-driven and sensitive to prevailing economic conditions to avoid unintended consequences for businesses and consumers.

According to the association, the non-alcoholic drinks industry accounts for about 33 per cent of Nigeria’s manufacturing output and supports more than 1.5 million direct and indirect jobs across agriculture, production, logistics, retail and small businesses. It noted that despite inflation, foreign exchange challenges and rising energy costs, the sector’s tax contributions increased from N123 billion in 2022 to N127 billion in 2023, while companies already remit between 40 and 45 per cent of their gross revenues in taxes.

MAN argued that Nigeria’s per capita sugar consumption remains relatively low at about 7.1kg annually and that there is no conclusive evidence linking sugar-sweetened beverages as the primary cause of non-communicable diseases (NCDs) in the country. It maintained that such health conditions are influenced by multiple factors, including lifestyle, genetics, environmental conditions and broader dietary habits.

The association called for a coordinated excise framework based on predictability, proportionality, minimal market distortion and economic sustainability. It urged the Federal Government to engage the National Assembly to discontinue the proposed legislation, preserve the integrity of the 2026–2028 Fiscal Policy Measures framework and ensure consistency in excise policy administration.

Similarly, the Lagos Chamber of Commerce and Industry (LCCI) acknowledged the government’s public health objectives but cautioned against imposing additional tax burdens on manufacturers already grappling with high energy costs, exchange rate volatility, elevated interest rates, logistics constraints and weak consumer purchasing power.

The chamber warned that higher taxes could increase production costs, drive up consumer prices, worsen inflation and reduce demand for locally manufactured products. It also noted that the beverage industry supports an extensive value chain comprising suppliers, farmers, transporters, retailers and service providers, all of whom could be affected by lower production volumes.

LCCI advocated a broader public health strategy centred on consumer education, product reformulation, improved labelling and stakeholder engagement.

It suggested that incentives encouraging lower sugar content in beverages would be more effective than revenue-focused taxation and would help achieve health objectives without undermining industrial activity and employment.

Also weighing in, the Centre for the Promotion of Private Enterprise (CPPE) described the proposed tax increase as ill-timed and inconsistent with government efforts to improve the business environment.

CPPE Director, Dr. Muda Yusuf, said manufacturers are already under significant pressure from rising production costs and multiple taxes. He warned that additional excise duties would increase consumer prices, weaken demand, reduce capacity utilisation and threaten jobs throughout the value chain.

Yusuf further argued that the proposal conflicts with ongoing fiscal reforms and the government’s existing framework, which already provides for an excise duty of ₦10 per litre on non-alcoholic beverages from 2026. According to him, introducing another layer of taxation would create policy uncertainty and weaken investor confidence.

While supporting efforts to tackle diabetes and other non-communicable diseases, Yusuf maintained that taxation alone is unlikely to deliver meaningful public health outcomes. Instead, he called for greater investment in nutrition education, public health awareness campaigns, preventive healthcare and initiatives that promote healthier lifestyles.

The OPS groups therefore urged lawmakers to reconsider the proposed legislation and pursue policies that protect public health while supporting enterprise, investment, employment and sustainable industrial development.